27. Memorandum of Conversation1
SUBJECT
- Claims/Assets
PARTICIPANTS
- Ambassador Han Hsu, Deputy Chief, PRC Liaison Office
- Tsien Ta-yung, Counselor, PRCLO
- Yang Yu-yung, Third Secretary, PRCLO, (interpreter)
- Richard Holbrooke, Assistant Secretary, EA
- Michel Oksenberg, National Security Council
- Elizabeth G. Verville, L/EA
- J. Stapleton Roy, Deputy Director, EA/PRCM
Ambassador Han came in at his request to discuss the claims/assets issue.
The meeting began with an exchange of pleasantries, during which Mr. Holbrooke noted that he had just completed a trip to East Asia, during which he had visited Indonesia, Malaysia and the Philippines. Holbrooke also noted that the Secretary had met that morning with Codel Brademas/Schweiker and with the President’s son, Chip Carter, and had spent one and one-half hours talking about the delegation’s trip to China.2 He had attended the meeting along with Oksenberg and Roy. The Secretary had expressed appreciation for the comments of the delegation on their trip; they had given a very good report. Holbrooke noted that the Secretary had referred to his hope that we could move forward toward normalization on the basis of the Shanghai Communique. It had been an interesting discussion.
Ambassador Han expressed appreciation for this information. He said that he had come to reply to Holbrooke’s presentation of March 17 on the assets question.3 The Chinese side had studied the position stated by the US side on March 17 and wished to reply as follows (Han then read the following statement from a notebook in his hand):
“The blocking of properties of Chinese nationals by US elements after the founding of the People’s Republic of China is in itself illegal. The Chinese side absolutely does not recognize it. As for the so-called properties of US nationals in China, even if the figures supplied by the [Page 84] US Government were to be established, without taking into account their one-sided nature, they would not in any way be comparable to the exploitation of the Chinese people and the plundering of Chinese resources by US capital over a long period of time.
“The US side should be clearly aware: it is the US that owes the Chinese people debts. The Chinese side has the right to settle accounts with the US side. Nevertheless, during Dr. Kissinger’s visit to China in February 1973, proceeding from the over-all situation, in which a new beginning in Sino-US relations had appeared after the issuance of the Shanghai Communique, the Chinese side, in order to promote the development of friendship between the Chinese and American peoples, agreed to solve the issue between China and the US by a package settlement, that is, by having the properties of US nationals in China and the blocked properties of Chinese nationals in the US offset each other.
“Throughout the entire course of the negotiations since then, the Chinese side has always adhered to the spirit of a package settlement and has endeavored to promote a reasonable settlement of the issue. The principles upheld by the Chinese side are as follows: First, US laws can by no means govern China. No wordings such as ‘designated and special designated nationals of the PRC’, which one-sidedly give consideration to US laws, should be used in documents and agreements between the two sides. Second, bonds and bonded debts issued by defunct governments of old China are all null and void. The Chinese side has absolutely no obligation to repay them. Third, deposits already withdrawn by the Chinese side from third country banks, from accounts blocked by the US side, are not included within the scope of the assignment of assets to the US. All three of these principles are reasonable and are entirely in conformity with the understanding concerning a package settlement.
“Therefore, so far as the Chinese side is concerned, the question of returning to the understanding originally reached does not exist. The responsibility for causing complications does not rest on the Chinese side. We have always maintained that settlement of the assets issue between China and the US should not be difficult as long as the US side really has a sincere desire to do so. That is the position of the Chinese side.”
Holbrooke said that he could assure Han of the sincerity of the President and the US Government in seeking a resolution of this issue. He said that the US side would have to study the Chinese position and asked if there were any questions from others present.
Mr. Roy asked Ambassador Han to confirm his impression that the present Chinese statement was essentially a repetition of the position taken by the Chinese in November, 1973. Han said that the position he [Page 85] had stated had been the consistent Chinese position, as stated both in November 1973 and on June 14, 1974.4
Holbrooke expressed appreciation to the Chinese Government for considering our proposal and assured Han that we would give the same serious consideration to their proposals that the Chinese had given to ours.
The meeting then turned to other matters.
- Source: Carter Library, National Security Affairs, Staff Material, Far East, Oksenberg Subject File, Box 51, People’s Republic of China (PRC): Chron File: 3–9/77. Confidential; Nodis. Drafted by Roy.↩
- See footnote 2, Document 25.↩
- See footnote 10, Document 21.↩
- Following Kissinger’s 4-day visit to China in November 1973, he summarized his discussions for President Nixon. On the subject of claims and assets, which was discussed primarily in counterpart meetings, Kissinger noted that the discussions were sometimes “harsh” but that eventually “we made some progress on this matter.” See Foreign Relations, 1969–1976, vol. XVIII, China, 1973–1976, Document 62. See also Documents 57 and 59. The June 14, 1974, agreement is summarized in telegram 985 from Beijing, June 14, 1974. (National Archives, RG 59, Central Foreign Policy File, [no film number])↩